TV streaming platform Roku is looking to go beyond dongles and software deals to build its own TV hardware, according to Insider.
The story appears to be based on two sources with different levels of familiarity with Roku’s plans. The first is someone who participated in a Roku focus group. “They showed different models, feature sets and names, sizes, prices,” said the participant.
The report claims that Roku is pursuing this strategy in part because of supply constraints that have hit consumer electronics. In its latest earnings report, its chief financial officer said supply constraints in the television market caused the company to miss its subscriber growth targets.
Roku used to be best known for its dongles and streaming boxes, but consumers are moving away from these devices as they buy more and more smart TVs with built-in streaming apps. Roku has been making more and more money in recent years by selling its smart TV software. In fact, the Roku operating system is the number one smart TV OS. Roku also gets a cut when its hardware or software directs subscribers to Netflix and other streaming services, and the company earns money from ads and user data.
Moving to TV hardware will allow Roku to have a bigger piece of the pie and build a stronger and more direct connection with its users and customers. However, TV hardware is a complex and marginal business compared to the worlds Roku currently operates in. This risky new path will not necessarily be successful.
When we reached out for comment, a Roku representative told Insider that the company does not comment on rumors or speculation.